Under federal law, the maximum yearly allowance for a single participant with no dependents in 2019 is $5,150 ($429.17 per month).
If you want, you can offer a higher allowance to employees who are married and/or have dependents (regardless of whether those dependents would be covered under the employee’s health insurance). They can legally receive up to $10,450 per year ($870.83 per month).
Can I offer a percentage of my employees’ total premium cost?
No, your allowance must be a fixed dollar amount.
Can I make the full year’s allowance available right away?
No, eligible employees will receive a pro-rated amount every month.
Do allowance balances roll over at the end of the year?
No, allowances can only be used for expenses incurred during the calendar year when the allowance was accrued.
Can I offer different amounts to different employees?
Only based on family status as outlined above.
You can choose whether to offer the benefit to part-time employees, but if you choose to offer them the benefit, the law requires that they receive the same allowance as full-time employees.
What can my employees use their allowance for?
Most often, eligible employees use their allowance for health insurance policies that they purchase via the ACA exchanges. COBRA, dental, vision, Medicare and a few other less-common types of insurance are also reimbursable.
Eligible employees can also use their allowance for over 200 types of eligible medical expenses. [link?]
Can I change allowances midyear?
Yes, you can increase or decrease allowances any time during the year for any future calendar month. Allowance changes always take effect on the first day of the month.
Can I choose to cover only health insurance premiums?
No, eligible employees can use their allowance for health insurance premiums and any of over 200 qualified medical expenses. See what’s eligible
I have a limited budget. How do I decide how much to offer?
We’ve found that employees find value with even small allowances, but employee satisfaction and utilization increase with higher allowances.
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Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Health insurance regulations differ in each state. See a licensed agent for detailed information on your state. PeopleKeep, Inc., does not sell health insurance.